Mahindra exploring tie-up with Ford to enter new markets Posted on 4th September 2018

Nashik: Mahindra and Mahindra Ltd is exploring the feasibility of entering emerging markets such as Indonesia and Russia in partnership with Ford Motor Co. “We are exploring various aspects with Ford; manufacturing, sourcing, engineering or even on the retail front. But things are at a very initial stage (in these markets) to conclude what aspect we will be partnering on,” said Mahindra managing director Pawan Goenka.

In September 2017, Ford and Mahindra said that they are exploring a strategic alliance to “leverage Ford’s global reach and expertise and Mahindra’s scale in India”. The agreement, the firms said, would allow them to combine their strengths during a period of unprecedented upheaval in the automotive industry.

If Goenka’s plans go through, Mahindra will be the first Indian automaker to strike such a global alliance. Analysts say such an arrangement will benefit both auto makers.

“India is emerging as a regional manufacturing hub with scale economies to serve other smaller regional markets. In this situation, Ford can bring the experience in distribution to these markets, combined with the scale economies of manufacturing in India, which would optimize the combined capacity of both partners,” said Rakesh Batra, partner and national auto leader at consulting firm EY.

A similar pact between Tata Motors Ltd and Volkswagen AG failed to make progress after an initial agreement. A wave of consolidation is sweeping through the sector. Toyota Motor Co. has bought Daihatsu, while Nissan has acquired Mitsubishi. General Motors Co. has pulled out of some key markets, including India, and is doubling down on North America and China.

Amid all this, Mahindra has decided to develop products on a global scale, in collaboration with unit Mahindra Automotive North America (MANA) and iconic design firm Pininfarina SpA, Anand Mahindra, executive chairman of Mahindra, said at the launch of the Marazzo multi-purpose vehicle on Monday.

The Marazzo was the first product to be jointly engineered by MANA in Detroit and the Mahindra group’s research and development centre, Mahindra Research Valley (MRV) in Chennai. Pininfarina, which Mahindra bought in December 2015, worked on the design in collaboration with Mahindra’s local design studio in Mumbai.,p>The 1.5-litre, four-cylinder diesel engine on the Marazzo was jointly developed by MRV and Austria-based engineering and power train firm AVL List GmbH. “It (the Marazzo) is a proof of concept of Mahindra’s global network of R&D working together to deliver world-class products,” Mahindra said. “We have the confidence that we can once again use this neural network (of development centres) to deliver.”

Accordingly, Mahindra has already started development of another vehicle at MANA, which would see support from MRV, Pininfarina and Mahindra’s local design centre, Goenka said, without disclosing further details.

The development of Marazzo started four years ago, coinciding with the setting up of MANA. With a new platform, drivetrain, engine and transmission, product development costs for the multi-purpose vehicle are about $200 million, Goenka said. To compare, the Scorpio, launched in 2002 at Mahindra’s Nashik plant, was developed for $120 million.

Product development is increasingly becoming expensive because of regulatory compliances, testing and validation, said Rajan Wadhera, president of the automotive division at Mahindra.

More models on this new platform were under consideration, Wadhera said, adding that the compact sports utility vehicle code-named S201 to be launched this fiscal would be built on the platform with minimal changes.

With large families and businessmen as the target audience, Mahindra had set aside a fungible capacity of 8,000-9,000 units per month between the Marazzo and the S201, said Veejay Ram Nakra, senior vice-president, sales and marketing.

Mahindra hopes to add 9,000-10,000 units to its monthly sales, with three launches planned this fiscal and sees “a substantial” increase in market share, Nakra said.

Buyers of Samsung’s Galaxy S series of premium smartphones will have to shell out close to Rs 1.18 lakh to get their hands on the top-end model of the device that starts selling in India from March 8.

Samsung had launched three models - Galaxy S10+, Galaxy S10 and Galaxy S10e - in San Francisco on February 20. These flagship devices will compete head-on with Apple’s iPhone that is seeing sales slowdown in many markets, including China.

GMR Infrastructure on Friday said its subsidiary GMR Airports and its Greek partner Terna Group have signed a concession agreement for construction of the new international airport in Greece's island Crete.

The consortium intends to invest over EUR 500 million (approx Rs 4,034.28 crore) for development of the new airport, GMR Infrastructure said in a regulatory filing.

Oil marketing companies hiked the price of petrol by 14-15 paise and that of diesel by 16-18 paise a litre the major metros on Friday. In Delhi, petrol prices were hiked by 14 paise to Rs 71.29 a litre as against Rs 71.15 yesterday. One litre of diesel can be purchased for Rs 66.48 in the national capital. In case of Mumbai, one litre of petrol can be purchased for Rs 76.93 up from Rs 76.79 per litre, implying a 14 paise hike.

The diesel cost has been raised to 69.63 in the financial capital. In Kolkata, one litre of petrol is retailing at Rs 73.39, while diesel can be bought for Rs 68.27. In Chennai petrol prices have been hiked to Rs 74.02, while consumers will now have to pay Rs 70.25 in Chennai. The revised rates are applicable from 6 am on Friday morning.

Shares of Bata India hit a new high of Rs 1,301 apiece, up 1 per cent on the BSE, surging 50 per cent in past four months after it reported a strong earnings growth in December 2018 (Q3FY19) quarter and foreign portfolio investors buying. In comparison, the S&P BSE Sensex was up 6 per cent during the same period.

Thus far in the calendar year 2019 (CY19), Bata India has outperformed the market by gaining 15 per cent, against unchanged benchmark index. In CY2018, it soared 52 per cent, as compared to a 6 per cent rise in the Sensex.

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